Thursday, March 31, 2016

Leaked confidential documents show
that oil contracts worth billions were awarded on the basis of bribes,
many organised by a 'fixer' company known as Unaoil, run by Ata Ahsani
(pictured)

Follow @KonnieMoments1 Trail of the huge globe spanning grand oil 'payola' scandal .... News report claims 'fixer' firm Unaoil paid billions in bribes to help
multinational companies secure contracts, including in the Middle East U.S. firms Halliburton, former subsidy Kellogg, Brown & Root and Texas firm National Oilwell Varco are all implicated Leaked documents allegedly prove corruption between 2000 and 2012
Unaoil has denied corruption, while companies involved have stated
their anti-corruption policies and committed to working with
investigators
Continue for the indepth story ...

The FBI and Justice Department have launched an investigation into alleged oil industry corruption worth billions of dollars after American companies were implicated in leaked documents.American authorities will be investigating alongside their British and Australian counterparts after an investigation by Huffington Post uncovered an alleged bribery racket stretching around the globe.Leaked documents obtained by HuffPo show government contracts worth billions were awarded on the basis of bribes, many organised by a 'fixer' company known as Unaoil, it is reported. The news report, produced alongside Fairfax, said bribes were paid on behalf of many major international companies across Asia, Europe, the United States and Australia.U.S.
giant Halliburton and its former subsidiary Kellogg, Brown & Root
are implicated, along with Texas firm National Oilwell Varco, Singapore
conglomerate Keppel, Norway’s Aker Kvaerner and giant Turkish joint
venture GATE.

Individual
executives and managers from Halliburton and Kellogg Brown & Root,
which split in 2007, knew or suspected that Unaoil was acting corruptly
to win contracts in Kazakhstan, it is reported.

Meanwhile
managers from Italian firm Eni, Spanish Firm Tecnicas Reunidas, French
firm Technip, drilling giant MI-SWACO and British company Rolls-Royce
actively supported bribery and were offered or pocketed their own
bribes, it is alleged.

Unaoil,
which is incorporated in Monaco but based in the British Virgin
Islands, posited itself as providing 'industrial solutions to the energy
sector in the Middle East, Central Asia and Africa.'

Essentially
the company's job was to help international firms win contracts in
parts of the world where they didn't operate and had no local expertise.

The
company, run by Ata's sons Cyrus (left) and Saman (right), is based in
Monaco and helps firms secure contracts in parts of the world where they
don't operate. But leaked documents allegedly show many of these
contracts were secured using bribes

While
it is common for large, global companies to use such a fixer service,
documents acquired by HuffPo and Fairfax show Unaoil was winning these
contracts by bribing corrupt local officials.

In
one case, it is claimed, money was paid to middlemen in a bid to
influence senior Iraqi officials - including the deputy prime minister -
in order to win more than $1.3billion in oil contracts.

Similar
deals were arranged in Yemen, UAE, Kuwait, Syria, Libya and Iran, the
report says, fueling corruption and resentment which was one of the
leading causes of the Arab Spring.

The
leaked files allegedly indicate representatives of the companies
sometimes believed they were hiring genuine lobbyists when the outside
persons involved were involved in paying bribes.

At the centre of many of the deals is Unaoil, which allegedly uses its connections and relationships to influence others and help companies win lucrative government contracts.The
extent of the corruption in the oil industry was reported to be vast,
with The Age branding it 'the world's biggest bribery scandal'.

Ten
years ago, it is believed those running Unaoil, the family business
said to be responsible for providing the bribery services, had €190m
between them in cash, shares and property.

It is run by the Ahsani family, father Ata and sons Cyrus and Saman, and based in Monaco.

A Monaco-based company called Unaoil cultivated an astonishing web of influence.

The Bagman

There was little about the man walking through Heathrow Airport to
show he held secrets that could bring down some of the most powerful men
in Iraq.Moustached, olive skinned, hair receding, eyes sharp. His name was
Basil Al Jarah. His British passport showed he lived in Hull, an
unremarkable town in the north of England, but it bore the stamps of a
frequent traveller: London, Baghdad, Basra, Amman, Paris, Istanbul,
Kuwait.Basil Al Jarah was an oil industry fixer.
But had authorities known his true business, they might have taken a
far keener interest in the man waiting for a plane to Amman in 2011.
Because by that stage, Al Jarah and his employer, a Monaco-based company
called Unaoil, had cultivated an astonishing web of influence in the upper echelons of Iraqi power – all based on the simple expedient of bribing the right man at the right time.

As tens of thousands of secret emails reveal, Al Jarah and Unaoil
were at the heart of a global bribery operation funded, sometimes
wittingly, by dozens of US, British, European and Australian
multinationals. These firms paid huge sums to Unaoil. In return, Unaoil
used its friends in high places to win billions of dollars worth of
government contracts.In Iraq, the man charged with making those friends was Al Jarah. From
2003 onwards, he used his influence to help deliver huge contracts to
Unaoil’s clients. It did not matter if these clients were more expensive
or less capable than their competitors. Unaoil and Al Jarah were, in
effect, fleecing the people of Iraq, and in the process making a mockery
of the US government’s promise, after toppling Saddam Hussein, to
ensure Iraq’s oil wealth would benefit all Iraqis.Al Jarah was careful to cover his tracks. He struck deals in hotel
rooms late at night and used code words to communicate. To understand
the scale of Unaoil’s Iraq operation, someone would have to break these
codes. And to do that they would need access to thousands of emails. It
is almost certain Al Jarah never believed this possible.But last year, Fairfax Media and The Huffington Post began
investigating the underbelly of the global oil and gas industry. After
many months of digging and a trip across Europe, our reporters uncovered
a treasure trove of emails and memos. The 66-year-old former ship’s
captain from Hull, Basil Al Jarah, was the author of many of the most
colourful.They reveal him routinely bribing government officials who were
deemed “useful to us” and to Unaoil’s clients – multinationals such as
British firms Rolls-Royce, Petrofac and Clyde Pumps, US listed giants
Weatherford, Cameron/Natco and FMC Technologies and European firms such
Saipem, SBM Offshore and MAN Turbo.The emails suggest that for years the very highest levels of Iraq’s
oil industry – up to and including the deputy prime minister – has been
corrupted with impunity under the noses of Iraqi, British, European and
US authorities. This despite strict laws in the west designed to prevent
foreign bribery. They also tell us what Al Jarah’s main goal was as he
flew across Europe and the middle east that day early in 2011 — to
influence two of the most powerful men in Iraq on behalf of a company
that had agreed to pay bribes of up to $40 million.In 2003, when US-led forces rolled into Baghdad, the oil ministry was
among the sites designated for immediate protection. As looters
stumbled out of museums clasping irreplaceable antiquities, coalition
troops and tanks encircled the ministry building.The message was clear. Iraq’s future lay beneath its blood-soaked
earth, in some of the world’s biggest oil reserves. The question was,
who would benefit?In 2006, three years after the invasion, as conflict raged on, US
President George W Bush insisted that the oil belonged to the Iraqi
people: “It’s their asset,” he said. The US would help the new
government of Nouri al-Maliki use the nation’s resources to build a new
Iraq.That meant increasing oil production. It meant repairing wells. It
meant new pipelines, infrastructure and technology. The government
couldn’t do it alone. It would need the expertise and resources of the
giant American, British and European energy companies.To ensure a fair and transparent process, the Iraqi government sought
to run competitive tenders. The Saddam era, when the foreigner who paid
the biggest kickback won would win the job, had supposedly been
consigned to history.Unaoil, though, was old school. By the time of Bush’s declaration, it
had been operating in Iraq for three years, with Al Jarah as country
manager. Unaoil favoured the old kickback system, albeit with a new crop
of officials to be bribed.A 2005 email illustrates their modus operandi. Al Jarah wrote to
Unaoil colleagues about a meeting at Paris’ Charles De Gaulle airport
with a senior manager from US firm FMC Technologies. FMC’s “past contacts who held sway in the old [Saddam Hussein] regime are worthless now,” he wrote.“FMC must look to the future with new contacts and new faces. [FMC
manager] requested time to disentangle himself from his current agent to
sign up with Unaoil.”According to his email, Al Jarah had struck a deal for Unaoil to get a
5 to 10 per cent cut of any contract it could win for FMC in Iraq or
Kuwait. In Kuwait, for example, FMC had promised to pay Unaoil $2.5
million to win a $25 million contract. Unaoil could use a “portion” of
that fee to pay-off “the big cheese in Kuwait”.

Rolls-Royce Treatment

Al Jarah then approached a senior Iraq oil official, Kifah Numan, to
help the US firm. FMC wanted to win contracts that had already been
promised to its rivals. “I have to lean really heavy on Kifah to swing
this if at all possible. I will start softening Kifah from tonight.”Numan, in fact, features repeatedly in Al Jarah’s emails. Once in
Dubai, Al Jarah had to “baby sit [Numan] for 4-5 days” to ensure none of
Unaoil’s competitors made contact.“He is too valuable to leave him lose [sic] in Dubai for other
suppliers,” Al Jarah warned. Sometimes the attention was surprisingly
personal, and trivial. Al Jarah spent “US$2,684.00 for Gifts for Mr
Kifah during London visit”, including “Perfume, Various CD’s, Mobile
Top-Up and Leather Jacket”.At the time, Al Jarah was duchessing Numan on behalf of Unaoil client Rolls-Royce, which was chasing generator supply contracts worth tens of millions of dollars.“Getting
hold of Kifah to just spend any time with him is a bonus other
contractor/suppliers would give their right arm for. Hence spending
$2,684 on a key decision maker and remain in his good books to process
things … is worth 100 times that value, without which we would have no
contract [for Rolls-Royce] in our hands now.”In a later email, Al Jarah wrote that Numan had advised him that
Unaoil and Rolls-Royce could charge the Iraqi government inflated
prices, to ensure fatter profits.“He advised that cost will be no object… I expect we should make a
minimum of $2m per [Rolls-Royce generator] unit net. After all costs
have been taken into account.”Rolls-Royce has told Fairfax Media and the Huffington Post that
concerns about bribery involving intermediaries are being investigated
by the British Serious Fraud Office “and other authorities”. Rolls-Royce
is co-operating, said a spokesman, but “do not comment on ongoing
investigations”.In 2008, Numan became director general of the Iraq Government’s
powerful South Oil Company, which was in charge of the country’s most
valuable oil fields and infrastructure.“Kifah called me yesterday,” wrote Al Jarah, “he still didn’t know if
the news is confirmed. He said he… is planning to come to Dubai next
week while I am here … Don’t know about you, I am having few beers today
to celebrate.”The response from Unaoil CEO Cyrus Ahsani was equally upbeat:
“Excellent and let’s see how we can quickly do certain things to make
sure we are the only ones with access.”

Photo: Alamy

U.S. giant Halliburton and its former
subsidiary Kellogg, Brown & Root are implicated, along with Texas
firm National Oilwell Varco (file image)

According
to HuffPo, techniques used by the company's employees may include
bribing officials, organising rigged tender committees, avoiding the
tender process altogether, or leaking information.

Unaoil
earned its money by securing a percentage stake in all profits
generated by a deal its 'fixers' helped to establish, the report claims.

Having
secured its own cut in advance, the company then used a portion of that
money to pay bribes to relevant officials, before keeping the rest for
itself, it is claimed.

Unaoil owner Ata Ahsani was quoted as denying any wrongdoing, saying the company 'absolutely' does not bribe officials.

All
of the companies implicated in the report have stated their strong
anti-corruption policies and have stated their commitment to working
with investigating officials.

U.S. Oil Industry Giant Paid Millions To A Company At The Center Of Huge Corruption Scandal

While KBR was being investigated for bribery in Nigeria, it was partnering with a company that bribed officials in Kazakhstan.

Photo: Daniel Berehulak/Getty Images

The Houston-based KBR is again in the middle of a foreign bribery
scandal just seven years after pleading guilty to bribing Nigerian
government officials.

The American engineering and construction firm KBR hired Unaoil — an obscure Monaco-based company now involved in a massive international bribery scandal — to
help it win oil and gas contracts in Kazakhstan. KBR, which until 2007
was part of the oilfield services giant Halliburton, paid Unaoil
millions of dollars from 2004 until at least 2009, according to thousands of internal documents obtained by The Huffington Post and Fairfax Media. Halliburton and KBR have been in trouble for bribery in the past. After a years-long federal investigation, KBR pleaded guilty in
2009 to multiple criminal counts of violating U.S. foreign corruption
laws by bribing Nigerian officials. KBR agreed to pay $402 million as
part of a settlement. Halliburton and KBR also paid $177 million to settle SEC civil charges
related to the same conduct. Three years later, Albert “Jack” Stanley,
KBR’s former CEO, was sentenced to 30 months in federal prison for his
role in the scandal. As part of the deal with the Justice Department,
KBR agreed to waive many of its legal rights if it was caught violating bribery laws again. In the midst of the DOJ investigation, a KBR employee emailed Unaoil to warn the American company was “tightening”
anti-corruption controls in response to the federal probe. Despite
this, KBR continued to pay Unaoil for work in Kazakhstan for years
afterward.Throughout the emails, Unaoil and Halliburton/KBR employees use code words to refer to partners in Kazakhstan. In February 2005,Richard
Stuckey emailed Unaoil executive Peter Willimont from a Halliburton
email address, urging him to start “hobknobbing” [sic] with insiders
immediately. “My feeling is that a good spaghetti house is where it is
at of course a little shashlik for lunch is good to digest also,”
Stuckey wrote. The code names — which referred to an
Italian oil company (spaghetti) and Kazakhstan’s state oil apparatus
(shaslik, a form of kebab popular in Kazakhstan) — won’t protect
Halliburton or KBR.“If those emails were written after
KBR was under investigation by the DOJ for prior violations, then the
penalty will be far higher than it would be if this was a first-time
violation,” says Andy Spalding, a law professor at the University of
Richmond who runs a blog on foreign bribery. “It doesn’t matter what
they’re going to argue, because a third-party law firm is going to come
in and read all these emails and interview all these employees and
they’re going to detect really quickly that they’re not talking about
food.”In 2004, Unaoil began trying to win a
joint contract for KBR and Petrofac, a British firm, to work on the
massive Kashagan oil field. The Kazakh Institute of Oil and Gas (KING), a
wing of Kazakhstan’s state-owned oil company, had been paying a man
named Leonida Bortolazzo as a consultant, according to a memo a
Halliburton/KBR employee sent bragging about Bortolazzo’s influence in
the country. But Unaoil was also paying Bortolazzo as much as $80,000 a
month, according to a contract between the Monaco firm and Bortolazzo’s
consulting company. In one instance, Unaoil bought tens of thousands of
dollars worth of high-end furniture for Bortolazzo, according to emails.
Unaoil’s contract with Bortolazzo also included a $165,000 signing
bonus.Halliburton had tried unsuccessfully
since 1998 to secure contracts in Kazakhstan but hit repeated
roadblocks. The development of the Kashagan field, one of the biggest
reserves discovered in decades, is managed by the clunky bureaucracy of
Kazakh dictator Nursultan Nazarbayev with the help of a clique of international energy giants. KBR’s partnership with Unaoil was designed to give it an advantage in the Kashagan contracting process just as the international oil companies that were managing the field began moving ahead on their final plans to develop it. Unaoil’s focus on Italians, including
Bortolazzo, shows that it knew whom to target. Bortolazzo was a former
manager at ENI, an Italian oil firm that’s been repeatedlyaccused of corruption.
ENI — the “spaghetti house” in the emails — is one of the smallest oil
companies involved in managing the Kashagan field, but it has taken the lead
on the reserve’s development under a 2001 agreement between the foreign
conglomerates and Kazakhstan’s state-owned oil company. Leaked Unaoil
emails indicate that Unaoil executives were trying to convince
Halliburton/KBR managers they could procure confidential information
from paid sources within ENI and the Kazakh government.“We need to convince Richard
[Stuckey, of Halliburton/KBR] … that we own the spaghetti house &
have a lease on the shashlik takeaway,” Unaoil’s Willimont wrote,
forwarding Stuckey’s February 2005 email to Cyrus Ahsani, the CEO of
Unaoil and the son of the company’s founder. “This done we can get our
deal signed.” Convincing Halliburton/KBR of its
influence in Kazakhstan required Unaoil to accommodate some unusual
requests. In August 2008, after KBR had split from Halliburton, Unaoil
spent tens of thousands of euros on hotel rooms for Kazakh officials
visiting Monaco, where Unaoil is headquartered, according to emails.
That particular expense shows just how much suction Unaoil won in
Kazakhstan for its American client: Among the officials it hosted was
Kairat Boranbayev, at the time the
chairman of the board of the Kazakh state oil company’s joint venture
with Gazprom, Russia’s state-owned gas monopoly. Unaoil officials were
at pains to find him space at a “Prestigious Hotel” given that he was
visiting right as Monaco was hosting high-profile soccer matches.
Boranbayev ended up in a suite at the Fairmont worth €1,700 a night.
His aides stayed in more basic rooms that only cost €900 nightly.
Boranbayev is today known for his ties to the Kazakh dictator (his
daughter married Nazarbayev’s grandson at a 2013 wedding featuring Kanye West), lavish moves like paying Pussycat Dolls star Nicole Scherzinger more than $100,000 to perform at his posh London home and his control of Kazakhstan’s McDonald’s franchise. The expenses were worth it for Unaoil
because of KBR’s high profile. “This is the best agency we have have
ever had,” Willimont wrote in a June 2008 email to Cyrus Ahsani. “Our
ability to live from the reputation of working with KBR is immense.”
Unaoil would tout its work with KBR in marketing materials for years to
come.Did Unaoil bribe public officials? “The answer is absolutely no,” Ata
Ahsani, the company’s founder, told The Huffington Post and Fairfax
Media.The “alleged behavior” of “some” of “Eni’s employees is in detriment of the company, as well as in direct
and obvious conflict with Eni’s code of ethics that any employee is
required to fully comply [with],” an Eni spokeswoman said in an email.
“We do not comment … on the results of possible internal investigations.“ The spokeswoman was not referring to Bortolazzo specifically.Bortolazzo did not respond to a request for comment.Kazakhstan’s embassy in Washington
did not immediately respond to a request for comment on the role of the
state-owned oil company and associated officials. A spokesperson for
Boranbayev said he was on vacation and not available for comment.Halliburton and KBR deny wrongdoing.
“Halliburton maintains an active, comprehensive Ethics & Compliance
Program which includes business practices and policies to ensure that
Halliburton and its employees are compliant with all regulatory laws and
requirements globally,” Halliburton said in an email to The Huffington
Post. “We have no current or recent relationship with [Unaoil].
Halliburton has not owned KBR since 2007 so we have no knowledge of its
business relationships.” KBR “is
committed to conducting its business honestly, with integrity, and in
compliance with all applicable laws,” the company said in a
statement. “We do not tolerate illegal or unethical practices by our
employees or others working on behalf of the Company.” But emails between Unaoil and
Halliburton/KBR employees during the Justice Department’s investigation
into previous bribery allegations show a company rushing to discontinue
practices that could raise red flags with investigators, but not
severing the underlying partnership. In July 2005, Tony Fossey, KBR’s
finance manager for the Kashagan Project, emailed Willimont to discuss
KBR’s “Nigerian agent problem,” referring to the Justice Department’s
investigation into the group bribing Nigerian officials to win
contracts. Fossey, who left the company that year, refused to comment on the record.At the time, Unaoil listed a London
address on its contract with KBR, but requested payment from KBR through
a wire transfer to Monaco. “A part of the fall-out from [the DOJ
investigation], is a considerable, ‘tightening’ or our US management’s
approach to controlling the whole arena of agent payments,” Fossey wrote
to Willimont, explaining that sending payment to Monaco, a country not
listed on the contract, could violate FCPA rules.It’s not clear from the emails whether the payment ever went through.In 2006, Halliburton objected to
making a payment to a bank account in the Channel Islands, a notorious
offshore tax haven, on the grounds that the Unaoil subsidiary named in
their contract was in fact based in Monaco, according to emails. Unaoil
agreed to accept payment at its Monaco bank account.In 2008, Unaoil employees determined the company needed a new bank account in Kazakhstan to receive payments from KBR. “We
need to open a new Bank Account… in Kazakhstan into which our future
KBR revenues will flow,” Sandy Young, Unaoil’s finance manager, wrote to
another employee in February of that year. “More and more our
principals are asking to have the right to audit our companies as part
of their governance rules and it is much easier for us to comply with
this request if we use a separate bank account (this way we can limit
the access we give them to information about our company activity).”As late as January 2009, KBR was
making payments to Unaoil. That month, it paid $936,713.37 to Unaoil’s
new account in Kazakhstan, according to a bank transfer record included
in one of the emails.A few weeks later, on Feb. 11, KBR
entered into a deferred prosecution agreement with the Justice
Department regarding its activities in Nigeria, and agreed to pay a $402
million criminal fine. Its work with Unaoil didn’t come up. Patrick Stokes, one of the three
lawyers who prosecuted the Nigeria case against KBR, is still a top
official at the Justice Department division charged with cracking down
on foreign bribery.

Attempts by Unaoil muzzle the press:Threatened To Seek Injunction Before Publication Of Bribery Expose

An Australian media company partnered
with The Huffington Post on a six-month investigation that began with a
source’s unusual request.

Fairfax Media

The Age splashed the investigation into Unaoil across Thursday’s front page.

NEW YORK — Unaoil, the Monaco-based company at the center of an
international bribery scandal, threatened this week to prevent
publication of an investigation into its business practices.Australia’s Fairfax Media and The Huffington Post on Wednesday published the results of a six-month investigation into Unaoil paying bribes
on behalf of major corporations doing business in the Middle East. The
reporting was supported by hundreds of thousands of leaked emails and
documents. Before the articles were published,
attorneys representing Unaoil and its owners, the Ahnsani family,
requested that Fairfax Media — which owns major Australian outlets like
The Age newspaper — turn over all copies of confidential information or
data possessed by its journalists, Nick McKenzie and Richard Baker. “We also request that Fairfax desist
from publishing any material concerning our clients until such time that
our clients have been able to verify that their confidential data is
not being used to make scandalous and defamatory allegations,” Rebekah
Giles, an attorney in the Sydney office of law firm Kennedys, wrote in a
March 29 letter. Giles wrote that the firm’s clients
reserved the right to seek “urgent interlocutory relief” — in other
words, an injunction to possibly prevent publication. That threat now
seems moot, since Fairfax Media published the results of its investigation online Wednesday and in in its print edition on Thursday.Giles did not respond to a request for comment.

How the investigation started....

In a separate article, McKenzie described the bribery investigation’s unusual genesis. It began after he received a letter from a source, who asked that he place an advertisement in a French newspaper using the code name “Monte Christo.”McKenzie and the source communicated
back and forth for several months and finally met in Europe. The
award-winning journalist described being introduced later to additional
sources and eventually receiving large chunks of information, including
tens of thousands of Unaoil emails. “The sources of this story never
asked for money,” McKenzie wrote. “What they wanted was for some of the
wealthiest and most powerful figures in governments and companies across
the globe to be exposed for acting corruptly, and with impunity, for
years.”

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